The markets have seen over 200 mortgage lenders fail in the past twelve months. The nations largest mortgage lenders come close to failing, a large investment bank Bear Stearns forced to be acquired by JP Morgan Chase, one of the largest regional banks in Southern California, IndyMac go out of business. In short, this has been a horrible run for financial companies. This week some of the largest banks in the world reported earnings that were significantly lower than their 2007 marks, yet for most analysts this was enough to convince most that the financial markets have turned the corner.

There is little doubt that the U.S. housing market will recover in the next 12 months. Most real estate professionals believe that it will take a minimum of 12 to 18 months for the excess inventory to finally work itself out of the market. This acknowledgement seems to be the most likely scenario for finally putting the foreclosure and housing crisis in the rear view mirror. It is very likely the Federal Reserve will slowly begin to raise interest rates in the upcoming months, as a way to boost up the U.S. Dollar and slow down the inflationary pressures from high oil prices. Mortgage rates are unlikely to move much higher as their remains a great deal of uncertainty within the markets. Financial stocks have probably come close to seeing their bottom for the year and should begin to trade up as the companies execute on their recovery plans.

7-20-2008©LowRateMortgage.com

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